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On with today’s commentary, Predator Oil & Gas (PRD) announced a £10 million placing at 11p just after market close on Monday (I said last Sunday in the blog that a placing appeared imminent). Funds are stated to be for completion of an extended rigless testing programme for MOU-1, MOU-3 and MOU-4, commencement of CNG development studies and tendering for long lead items, residual MOU-4 well costs and general working capital. PRD was the subject of a huge message board ramp immediately beforehand with the share price moving up from under 10p to over 20p. Substantial forward selling is said by some to have taken place during this time (while all voices of caution were being silenced on the message boards) with private investors paying up to twice the price of the 11p shares and the difference, claimed to be as much as £5 million, effectively transferred from the accounts of the private investors to those of the insiders. The placing came as a shock to many of the shareholders. Based on previous RNS announcements, numerous investors thought MOU-1 had already being flow tested (or, at least, its flow testing was already financed along with the costs for testing MOU-3) and a prospectus, including a CPR, would be published before any placing. Regardless, is it a buy now at 12.5p? With no official details of another drill upcoming, it’s purely a bet on the contents of the CPR and a gamble on the outcome of flow testing. That’s on the basis of its last RNS, of course. If PRD was to delay testing yet again and instead drill another well (one with a large target is being talked about) then it could be a promising trade again as with its other drills to date. (I covered PRD several times previously in the private blog at and it performs well with a drill: MOU-1 was financed with a 4p placing and the share price reached a high of 22.5p prior to the spud; MOU-2 was financed with a 5.5p placing and the share price reached a high of 12.3p prior to the spud; MOU-3 was financed with another 5.5p placing and the share price reached a high of 9.89p prior to the spud; MOU-4 was financed with an effective placing at 10.5p and the share price reached a high of 21.3p subsequently.) It should also be noted that the new placing shares have not yet been admitted to trading. PRD does not have the headroom to enable admission. In the event that the prospectus is not approved by the FCA in time to enable admission on 15 August, admission will be delayed until the company does have sufficient headroom. The back stop date is 31 August.
Another company raising last week to flow test a potentially non-commercial well was 88 Energy (88E), which announced a non-renounceable rights issue to raise £6.29 million at 0.31p. The principal use of the funds is expressed to be for the flow testing of the Hickory-1 well at Project Phoenix, North Slope Alaska in 2023/2024. Also covered by the fundraising are planning and permitting activities for the potential drilling of an exploration well at Project Leonis, North Slope Alaska in 2024/2025, but that’s a year and a half away. Project Phoenix lies next door to Pantheon Resources (PANR)’s acreage, whose own disappointing flow test results saw the share price crash down to less than 10% of its high. The last raise for new flow testing by PANR was in May this year at 17p. The share price now has declined to under 11p. Flow testing simply doesn’t create the same excitement with the public as drilling. The popular imagination is that when a well comes in, oil and/or gas comes shooting out. The idea/importance of flow testing doesn’t really enter their thoughts. (I covered 88E several times previously in the private blog and it’s another one that performs well with a drill: Charlie-1 was financed with a 0.7p placing and the share price reached a high of 1.48p prior to the spud; Merlin-1 was financed with a 0.33p placing and the share price reached a high of 4.7p subsequently; Merlin-2 was financed with a 1.49p placing and the share price reached a high of 2.817p prior to the spud. PANR I’ve only ever covered as a possible short, from 140p down.)
Eco (Atlantic) Oil & Gas (ECO) announced its audited results for the year ended 31 March 2023. Cash and cash equivalents were $6.4 million as at 31 July 2023. Total liabilities were reported as $5.9 million. The principal project is Block 3B/4B, offshore South Africa in which ECO now has a 20% stake (the recent sale of a 6.25% working interest in the block to Africa Oil Corp. brings in up to $10.5 million cash). A new CPR released by the operator earlier this year confirmed that the block contains estimated P50 prospective resources of approximately four billion barrels of oil equivalent and an application has been made to drill one well and one contingent well in the north of the block. Funding for the drilling remains reliant on a farm-out.
For those not familiar with me, I focus exclusively on small cap oil and gas exploration companies and know this sector inside out. I have been involved in the stock markets (both UK and US) since the early 1980s and understand exactly how the finance and promotion game works. I also have many years' operational and corporate experience in the oil business, which enables me to see very quickly whether or not managements are telling the truth. I share my take on the various companies and as those who follow me know, I'm rarely wrong about them.
Now, on to the news from the immediately exciting companies in which I’m investing.